Suppose Johnny invests $2,745 into an account, which has been earning interest for many years and he now has a total of $39,974. In two or more sentences explain why a negative number would/wouldn’t be reasonable in the solution of the rate he received on his investment.

Question

zarkam21 · Answer

@Shadow

Shadow · Answer

This one seems kind of simple. A negative rate of return would cause a decrease in value, not a gain, no?

zarkam21 · Answer

The reason why we wouldn't have a negative number be reasonable in the solution of the rate received is because if you originally start with a positive number you end up with one as well. This is the reason why we can't have negative if the investment and/or final amount is is more than the original

Shadow · Answer

I would focus on the value being greater / less than as opposed to negative # on the rate making 'you end up with one as well.' This part is obscure, I don't know if you mean the total value or actual cash flow.